Financial advisers are retiring in droves, with 37% of advisers planning to retire in the next decade. The biggest shocker is that many of these advisers don’t have a succession plan of their own to follow. A lack of a succession plan leaves their businesses at risk.
But those who don’t have a plan in place are considering a lot of avenues to leave their business in good hands.
These avenues can be followed by any business owner to help their business survive long after they’ve died.
1. Hand the Business to a Colleague
Colleagues spend time, energy and passion helping you grow your business. These are the key individuals involved in your business, and chances are, you’ve trained and grown together. Colleagues are a great choice to leave your business to when you retire or die.
You can hand off your firm to:
- Business partners
Many financial advisors are choosing this path for their business’s succession. “Replacing the founder may require more than one person. For many firms that are at or nearing $100 million in assets, this certainly means you will require more than one successor,” states transition specialist, Aaron Hasler.
2. Pass the Business to a Family Member
Maybe you don’t want to hand your legacy off to a colleague – that’s understandable. A lot of businesses will be passed down to family members or even junior colleagues that are working their way up in the company.
The biggest issue you’ll face is knowing when and if these individuals will be prepared for the task.
Oftentimes, it’s a matter of:
- Training the family member
- Continuing training through a transition period
If you plan to retire, offering your help through the transition can help ensure that your business remains operational during your departure.
3. Refer Clients to Other Businesses
Perhaps you’re done with your business. The passion is gone, and you would rather not have to deal with transition issues. One choice that a lot of businesses are following is to refer their clients elsewhere during their last year of operation.
This is a very risky option, so make sure that you’re 100% ready to close your business operations if you choose this route.
Succession plans can be very difficult to swallow, but if you plan to close your business, simply recommend your clients to other businesses that can meet your clients’ needs. You may even ask for referral fees or commission, and a lot of businesses are more than willing to oblige to secure new clients.